Wal-Mart Case Analysis Essay

944 Words Nov 22nd, 2008 4 Pages
Wal-Mart – Case Analysis

Situational Analysis Wal-Mart is an American publicly incorporated large retail company founded by Sam Walton in 1962. The secret of Wal-Mart’s tremendous success is its ability to provide an immense number of merchandise from electronics to pharmaceutical goods at a discounted price all in one store. As the largest employer in the world, Wal-Mart enjoys an estimated 20% of the retail grocery business. Recently, after years of disappointing investors, shares of the discount chain have jumped to a four-year high. But are they now too pricey? Compared with the broader stock market, Wal-Mart's stock performance has been tremendous. While the Standard & Poor's 500-stock index has tumbled almost 9% so
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Alternative I: Wal-Mart needs to increase the efficiency in communication between company sectors allowing for decreased lag time in strategy implementation. Wal-Mart can create a widespread communication network that integrates all stores, offices, warehouses and suppliers. This will allow Wal-Mart to not only supply value to its customers by presenting a wide variety of merchandise at low prices, but also provide its suppliers a permanent connection for sales of merchandise. This connection also provides an extremely proficient feedback loop on unit sales, demand and inventory, assisting a just in a time supply management system and an effective needs-based position.

Alternative II: Through cautious negotiating and sheer-size, Wal-Mart has great power over suppliers, and thereby purchases merchandise at cheaper price than the competition. However, in order to increase brand loyalty Wal-Mart, must be more aggressive in the way they advertise their brand if they want to draw even more attention away from competition. Wal-Mart can distinguish them-selves through private branding for example Costco Wholesale. In addition to the added differences, they can become less reliant on branded manufacturers, further eroding the influence that suppliers may have. This allows them to make use of their initial strategy of opening stores in suburban areas that were traditionally ignored, by establishing a continuous supply of low priced

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